80% of Public Companies DON'T need internal controls nor audits
SEC Advisory Committee on Smaller Public Companies delivered their final report on 23-Apr-06. The 150 page report recommends SEC provide to Smaller Public Companies exemptive relief from the SOX Section 404 requirements and external auditor involvement in the SOX Section 404 process. Also the committee recommends reducing audit standards to only an external audit of the design and implementation of internal controls and not implementation. The committee recommended scope of Smaller Public Companies covers market capitalization of less than $787.1 million, which covers about 80% or 7400 of all 9400 public companies. Three committee members dissented from these recommendations and all Big Four accounting / auditing companies protested on www.sec.gov/rules/other/265-23.shtm. One observation was the external auditor report would not address the question most critical to investors - are the controls working?
Would your customer ever tell you that your company is too small to need a good quality management system, such as ISO 9001?
